ServiceNow (NYSE:NOW) fell 5% in extended-hours trading on Wednesday after the cloud computing firm offered up weaker-than-expected guidance that overshadowed first-quarter strength.
For the second-quarter, it expects subscription revenue to be between $2.525B and $2.53B, (including a $17M foreign exchange impact), below the $2.54B estimate, which does not account for foreign exchange.
For the full-year, it now sees subscription revenue between $10.56B and $10.58B, compared to a prior view of $10.555B to $10.575B.
The weak guidance comes after ServiceNow said subscription revenue rose 24.5% year-over-year in constant currency to $2.52B during its first-quarter, above the high-end of its previous guidance. Current remaining performance obligations also topped previous guidance, as the closely watched metric came in at $8.45B, up 21% year-over-year.
On an adjusted basis, ServiceNow earned $3.41 per share on $2.6B in revenue. A consensus of analysts expected the company to earn $3.13 per share on $2.59B in revenue.
Adjusted operating margins surpassed 30% during the period.
The company signed eight deals during the quarter with a net new annual contract value of more than $5M, up 100% year-over-year. Four deals were signed for more than $10M, up 300% year-over-year, ServiceNow said.
ServiceNow also announced that it repurchased 225,000 shares for $175M during the period, leaving it with roughly $787M remaining.
Led by Chief Executive Officer Bill McDermott, ServiceNow will hold an analyst day on May 6 to provide an update on its strategy and generative artificial intelligence roadmap, among other topics.
(This story has been updated to include comments from the earnings call and reflect the impact of foreign exchange.)